Employee or Contractor: Feel Confident You are Getting it Right

Worker classifications matter and they go beyond merely labeling workers as either employees or contractors. The process of classifying workers may seem straightforward, but it’s more complex than many businesses realize.

So, why is the process of worker classification difficult? Because with each hire, organizations must do their due diligence and determine the classification based on the individual, the role and the responsibilities that fall within that role. Making the wrong classification exposes businesses to potential penalties, fines, taxes, interest, late fees, and legal battles by misclassified workers.

How confident are you about the classifications in place for your workplace?

Take a moment of pause and evaluate the worker classifications in your organization by answering these questions:

How well do you understand the distinctions between the state and federal laws associated with worker classifications?

Do you have a complete picture of how employee and contractor classifications are determined?

Are you aware of the distinct duties and responsibilities associated with common employee exemptions?

Do you know all of the factors that separate an exempt employee from a non-exempt employee?

Yes, we are a technology company, which may surprise you that we tackled this topic in our webinar series. But this is an important conversation for all businesses, of all industries.

Mimi Soule, managing partner of Soule Employement Law Firm, led our worker classification discussion. As an attorney, her firm is designed to provide business owners, managers and HR professionals with insight and guidance into employment law and HR compliance.

Is the webinar worth one-hour of your time? Absolutely, especially if it means gaining a better understanding of how to protect you business from the damages of misclassification. But whether you tuned into the webinar or not, we’ve pulled together the highlights you need to know.

Top takeaways to better understand worker classifications

The Fair Labor Standards Act (FLSA) is a federal law that applies to specific organizations. Employers must comply with FLSA unless the state of North Carolina provides greater requirements or benefits to employees. This distinction is due to the North Carolina Wage and Hour Act.

The North Carolina Department of Labor conducts its own legal test, known as Economic Realities. Structured as a six-part test, Economic Realities examines the employer-employee relationship. The test evaluates job skills required, dependency on employment, the permanence of the relationship and the opportunities for profit or loss.

Being a salaried worker does not necessarily constituent exemption from overtime. To be exempt, employees must meet the specific salary and duties requirements of an exemption.

The exempt status requires employers to determine worker classifications on a position-by-position basis. That distinction must be made based on the individual employee working in the role itself.

There’s still one more webinar with Mimi Soule on the books

Over the last two months, we’ve covered the hiring process and worker classifications in our webinar series. But we still have one topic left: the employee exit. Join us on Tuesday, April 10 as we dive into the not-so-fun, often complicated topic surrounding the employee exit process.

Based in Cary, North Carolina, Technology Associates is a full service technology consulting firm specializing in providing Managed IT Services for small to medium sized businesses (20 - 200 employees) throughout the Raleigh-Durham, Greensboro and Charlotte areas.

Managed IT Services is the core of what we do but using a unique approach developed over the past 20 years. We have a different perspective on IT costs and results which directly impact how we interact with our customers.

IT Support forms the foundation but it is much more than just picking up the phone when you have issues. ALL IT companies will do that. It is the specific processes and procedures we use to deliver our IT Services that set us apart.

If you have a business in Raleigh/Durham, Greensboro or Charlotte with 15 or more employees, we would love the opportunity to speak with you but chances are, you aren’t ready to make a change in your IT Vendor overnight.

So how about we just stay in touch until you are ready to learn more?

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